Real Estate Forum - February 2008

to Marcus & Millichap compilations. International visitors, meanwhile, are expected to partially offset that decline, thereby supporting demand for retail space, particularly in Miami Beach and South Beach. Asking rents are forecast to reach $25.45 per sf, a hike of 3.5%. Similarly, effective rents are on track to move up 3.4%, landing at $23.01 a sf by year’s end.

Untenanted industrial footage is on the rise in the Miami-Dade area. Since the fourth quarter of last year, some 4. 8 million sf has been added to the market, mostly due to Centergate at Gratigny, a 978,000-sf distribution and operations facility that was leased in the spring but vacated soon after, reports CB Richard Ellis. That caused an absorption total of negative 2. 2 million sf and a rise in vacancy from 4.2% in Q4 ’06 to 5.9% when 2007 ended.—Maria Wood

that the CBD and suburban vacancy rate has gone up from 6.5% and 7.8%, respectively, at year-end 2006, to 9.4% and 8.9% in 2007. And absorption went from a record-breaking two million sf over the year to 595,214 sf, mainly due to 673,684 sf of sublease space returned to the supply in 2007.

Lease rates, meanwhile, increased by $1.90 per sf for Downtown class A space to $28.06, while class A suburban rents ended the year at $22.44 a foot, a $1.54 uptick, CBRE reports.

Although office rental rates are expected to increase moderately over the year to compensate for higher oper-

6^th Annual

APRIL 29, 2008

Marriott Marquis New York

The Premier Event for the Net Lease, Sales Leaseback, 1031 & TIC Industries RETURNS!

Orlando

How will the changing debt and equity markets impact deal flow, and overall investment sales activity, in 2008 and beyond?

ALTHOUGH IT HASN’T BEEN HIT AS HARD as other parts of the state, Orlando is certainly feeling the effects of the residential housing slump. The fallout in the condominium market and competition from failed condo projects and other shadow space is expected to have a negative impact on the market’s apartment sector.

Marcus & Millichap anticipates local multifamily vacancy to rise 80 basis points this year to 8.1%. Class A units will likely underperform, while the B and C segment should benefit from a return of former homeowners to the rental pool. As a result, the firm expects asking rents to go up 2% this year to $899 per month, with much of the growth in B and C properties. Concessions, however, will bring effective rent growth to a mere 0.3%.

The sagging residential market is also hurting the office sector, as many homebuilders and mortgage and title firms close up shop and add sublease space to the market. CB Richard Ellis reports

AGENDA TOPICS:

The Numbers Behind the Trends

Town Hall Meeting: State of the Net Lease Market Capital Markets in Today’s Environment Green Outlook: The Greening of Corporate Real Estate Development Forum Net Lease Market Fact or Fiction 1031 Exchange Market Trends for Net Lease & TIC Investments The Sale-Leaseback Market: Source for Optimism? Credit Trends

EXECUTIVE SPONSOR:
Spectrus Real Estate Group
SPONSORS:
iStar Financial
Lexington Realty Trust
Marcus & Millichap
U.S. Realty Advisors, LLC
W.P. Carey & Co.